In the

United States Court of Appeals

For the Seventh Circuit

No. 08-2483

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellant,

v.

WATKINS MOTOR LINES, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 07 C 4115—Rebecca R. Pallmeyer, Judge.

ARGUED JANUARY 8, 2009—DECIDED JANUARY 23, 2009

Before EASTERBROOK, Chief Judge, and EVANS and

TINDER, Circuit Judges.

EASTERBROOK, Chief Judge. In June 2004, after experiencing three episodes of employee-on-employee murder

or attempted murder, Watkins Motor Lines decided that

it would no longer hire anyone who had been convicted

of a violent crime. Three months later Watkins rejected

Lyndon Jackson’s application because of his criminal

record. He filed a complaint with the Equal Employment
2 No. 08-2483

Opportunity Commission, which opened an investigation to determine whether the policy had a disparate

impact on minority applicants—and, if so, whether it was

“job related for the position[s] in question and consistent

with business necessity”. 42 U.S.C. §2000e–2(k)(1)(A)(i).

Watkins did not cooperate in the investigation, and on

April 8, 2005, the EEOC issued a subpoena seeking information that it thought pertinent to these subjects.

Almost four years have gone by. Jackson and Watkins

reached a settlement in January 2006. Watkins insisted

that the settlement be contingent on the EEOC’s abandonment of its investigation. Jackson told the EEOC that he

was withdrawing his charge of discrimination. But the

EEOC’s regulations give it discretion whether to allow a

charge to be withdrawn, and it decided to press ahead

with an investigation that covers persons in addition to

Jackson. In September 2006 Watkins Motor Lines sold its

operating assets to FedEx. But it remains potentially

liable to Jackson and any similarly situated applicants,

so the proceeding is not moot.

The district court did not act on the subpoena until

March 2008, when it dismissed for lack of subject-matter

jurisdiction the EEOC’s motion (filed in July 2007) to enforce

the subpoena. See 2008 U.S. Dist. LEXIS 25170, 103 Fair

Empl. Prac. Cas. 1523 (N.D. Ill. Mar. 26, 2008). Jackson

would be best served, the judge thought, by the settlement, and since that settlement is contingent on withdrawal of the charge the agency should have allowed him

to withdraw it. Because the agency’s contrary decision is

arbitrary, the judge wrote, it is as if no charge had been
No. 08-2483 3

filed—and, if no one makes a valid charge, the EEOC is not

entitled to investigate. See EEOC v. Shell Oil Co., 466 U.S.

54 (1984).

Although the judge thought that lack of a pending charge

deprives the court of subject-matter jurisdiction, that

conclusion is untenable. Several statutes supply jurisdiction. Two provisions of Title VII itself authorize district

courts to adjudicate subpoena-enforcement actions filed by

the EEOC. 42 U.S.C. §§ 2000e–5(f), -8(c). Then there is

28 U.S.C. §1345, which creates subject-matter jurisdiction for any suit filed by the United States or one of its

agencies. A district court’s belief that the EEOC should not

have investigated or sued does not detract from the fact

that it did ask the court to enforce its subpoena. A statute

authorizes the court to adjudicate this request. That’s all

subject-matter jurisdiction entails.

The district judge may have been misled by the statement in Shell Oil that a valid charge is essential to jurisdiction. The Justices appear to have meant the EEOC’s

jurisdiction, not the court’s. More importantly, Shell Oil

uses the word “jurisdiction” as a synonym for any mandatory rule. 466 U.S. at 65. It is important not to confuse this

common usage, which illustrates the proposition that

“jurisdiction is a word of many, too many, meanings”, Steel

Co. v. Citizens for Better Environment, 523 U.S. 83, 90 (1998),

with a rule that the court lacks subject-matter jurisdiction. To say that subject-matter jurisdiction is missing is

not only to require the judiciary to raise the subject on

its own—though no one thinks that the court must determine the “validity” of a charge in every case, even if the
4 No. 08-2483

parties do not raise the issue—but also to imply that the

dispute belongs in some other tribunal. The Northern

District of Illinois is the right tribunal, this is the right

time, and these are the right litigants, to resolve the

question whether Jackson’s request to withdraw his

charge ends the EEOC’s authority to investigate the noviolent-felony rule at Watkins Motor Lines.

Recent decisions of the Supreme Court distinguish

between genuine limits on jurisdiction and mandatory

case-processing rules. See, e.g., Eberhart v. United States,

546 U.S. 12 (2005); Kontrick v. Ryan, 540 U.S. 443 (2004). The

benefits of case-processing rules may be waived or forfeited. The Court has distinguished jurisdictional

from other requirements at least twice for Title VII in

particular. In Arbaugh v. Y&H Corp., 546 U.S. 500 (2006), the

Court held that the statutory definition of an “employer,”

which limits the Act’s coverage to businesses that have

at least 15 employees, does not curtail a district court’s

subject-matter jurisdiction. Closer to the mark, the Court

held in Zipes v. Trans World Airlines, Inc., 455 U.S. 385

(1982), that a court has subject-matter jurisdiction even

when a charge of discrimination is untimely. An employee’s delay in filing a charge gives the employer an

affirmative defense, Zipes held; it does not affect the

court’s jurisdiction. Just so with a timely charge that an

employee later tries to withdraw. Shell Oil does not overrule Zipes; it does not even cite Zipes. Shell Oil just used

the word “jurisdiction” loosely. And because the Court

found the charge in Shell Oil to be valid, it did not hold

anything about the consequences of an invalid charge for

a federal court’s jurisdiction.
No. 08-2483 5

The district court thus had subject-matter jurisdiction.

Still, Shell Oil says that the EEOC may use compulsory

process to acquire information only if someone has filed

a valid charge of discrimination. Shell Oil also shows that

the validity of the charge may be determined in the

subpoena-enforcement proceeding; the issue need not

await a later substantive suit by the agency or the

charging party. Watkins contends that Jackson’s request

to withdraw his charge should have been granted. Yet

withdrawing a charge does not mean that a valid charge

was never filed. Watkins does not contend, and the

district court did not find, that Jackson’s charge was

invalid when filed. All Shell Oil requires is a valid charge.

Once one has been filed, the EEOC rather than the employee determines how the investigation proceeds. Cf.

Doe v. Oberweis Dairy, 456 F.3d 704 (7th Cir. 2006) (a

charging party’s failure to cooperate with the EEOC’s

investigation does not block that investigation or a suit).

What the district judge said is that a charge sought to

be withdrawn to facilitate a settlement should be treated

just as if no charge ever had been filed. That stripe of legal

fiction has a history to which Watkins does not advert.

Consider a class action filed in federal court. Later the

defendant settles with the representative plaintiff, who

proposes to dismiss his complaint, or pays off the plaintiff’s claim and makes it moot. Does that mandate dismissal “as if the suit had never been filed?” Not at all.

The suit affects legal rights of persons other than the

initial plaintiff, and some other member of the class is

entitled to intervene to carry on with the litigation. See

Deposit Guaranty National Bank v. Roper, 445 U.S. 326 (1980);
6 No. 08-2483

United States Parole Commission v. Geraghty, 445 U.S. 388

(1980).

Or suppose plaintiff and defendant reach a settlement that is contingent on vacatur of all judicial

decisions made so far, in order to relieve the parties of

any preclusive or precedential effects that the decisions

carry. If “it is as if the suit had never been filed,” then

vacatur would be automatic. But U.S. Bancorp Mortgage

Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994), holds

that settlements, far from leading to automatic vacatur,

cannot dispose of precedents. A judge is not bound by

the parties’ choice but may exercise discretion and

usually should exercise that discretion against vacatur, in

order to preserve the decisions’ value for other litigants.

The argument that Watkins Motor Lines advances—that

withdrawing the charge and closing the investigation

will facilitate settlement—is exactly the sort of argument

made and rejected in Roper, Geraghty, and U.S. Bancorp

Mortgage. The problem with the argument is that it allows

litigants to achieve their settlement by injuring other,

unrepresented persons. Many a defendant would love

to decapitate a class after the statute of limitations has

run by paying off the sole representative plaintiff, and

thus avoiding potential liability to all other class members. Roper and Geraghty curtail that practice. That is what

Watkins tried to do here by making its settlement contingent on the withdrawal of Jackson’s charge, after

the time to file a new charge had expired. For the EEOC

had commenced a pattern-or-practice investigation that

might lead to relief for many persons in addition to
No. 08-2483 7

Jackson. The agency and the judiciary are not obliged

to abet this strategy by preferring Jackson’s interests

over those of other workers. Jackson and Watkins Motor

Lines are free to resolve their own dispute but may not

compromise the interests of other employees and applicants in the process.

The EEOC’s regulation says that “[a] charge filed by or on

behalf of a person claiming to be aggrieved may be withdrawn only by the person claiming to be aggrieved and

only with the consent of the Commission . . . where the

withdrawal of the charge will not defeat the purposes

of title VII”. 29 C.F.R. §1601.10. The agency does not

commit a legal error, or act arbitrarily, by concluding that

it will “defeat the purposes of title VII” for the settlement

of a single applicant’s claim to wipe out a pattern-orpractice investigation. The agency is entitled to vindicate

the interests of all employees and applicants.

Decisions such as EEOC v. Waffle House, Inc., 534 U.S.

279 (2002), show that the agency’s powers are independent of any resolution between employer and employee. (Waffle House holds that the agency may continue

its investigation even if an arbitrator has resolved the

dispute between a particular employee and the employer.) As we put it in EEOC v. Sidley Austin LLP, 437

F.3d 695, 696 (7th Cir. 2006): “The reason there was no

bar [in Waffle House] was not that the arbitration clause

was unenforceable but that the Commission was not

bound by it because its enforcement authority is not

derivative of the legal rights of individuals even when it

is seeking to make them whole.” If arbitration or, in
8 No. 08-2483

Sidley Austin, a given employee’s failure to exhaust his

remedies, does not foreclose independent investigation

by the EEOC, neither does a settlement in which the employer insists that the employee withdraw his charge.

To sum up: A valid charge was filed, and it gave the

EEOC the power to investigate. A court can’t rewrite

history by saying that one thing (a withdrawn charge) is

“as if” another (no charge ever filed). Note, however,

that two can play the “as if” game: The Commission’s

decision not to allow a private charge to be withdrawn is

“as if” a Commissioner had filed a charge. See 42 U.S.C.

§2000e–5(b) (either a person aggrieved or a Commissioner may file a charge). True, a no-withdrawal

decision does not produce a piece of paper captioned

“charge of discrimination” and signed by a Commissioner, but this is an “as if” exercise, after all. We

know from Federal Express Corp. v. Holowecki, 128 S. Ct. 1147

(2008), that a document may be a “charge” even if it lacks

an appropriate caption and charging language. A piece

of paper that alleges discrimination and asks the agency

to take remedial action suffices. Jackson’s initial charge

did that, and when the EEOC refused to allow Jackson to

withdraw the charge it substituted itself for Jackson as

the proponent. Treating a no-withdrawal decision as if it

were a Commissioner’s charge is especially appropriate

when it would be too late for a Commissioner to make

a formal charge. (Scuttling the existing investigation,

while making it impossible to start a new one given the

time limit in §2000e–5(e), appears to be Watkins’s goal.

That would leave all other applicants in the lurch.)
No. 08-2483 9

Watkins has not asked us to affirm the judgment on the

ground that the subpoena is needlessly burdensome or

otherwise inappropriate. Although we (like the district

judge) question whether the EEOC is acting prudently by

devoting time of both its staff and Watkins to shortlived practices by an entity that is no longer an operating

company, and whose rule may well be amply supported

by “business necessity” given its history of workplace

violence, the Executive Branch rather than the Judicial

Branch is entitled to decide where investigative resources

should be devoted. A charging party’s change of mind

does not diminish the agency’s authority to investigate

on its own behalf. The judgment of the district court is

reversed, and the case is remanded with instructions to

enforce the subpoena.

1-23-09